A surprisingly little-known introduction to "Click 365" | Episode 1: Differences from over-the-counter FX [Naonobu Onishi]

Profile of Yohei Onishi

Finance journalist. After working for a publishing company, he became independent in 1995 and has contributed articles mainly on financial economy in money magazines, business magazines, and weekly magazines. He has extensive coverage of analysts and strategists on the market’s front lines, as well as interviews with top executives of listed companies. He is proficient in FX and financial trading in general.

*This article is a reprint and revision of an article from FX Tactics.com, October 2018. Please note that the market information stated in the text may differ from current market conditions.

In terms of taxation, it’s equal to over-the-counter FX, but…

“Taxation is clearly more favorable than over-the-counter FX!” This used to be true for the exchange-based currency margin trading, “Click 365,” but circumstances changed after 2012. Profits earned on “Click 365” are subject to separate self-assessment taxation, and a flat 20% tax is applied regardless of the amount. Moreover, loss-offset tax calculations were allowed for profits to deduct losses.

In contrast, until 2011, over-the-counter FX was taxed under aggregate taxation. If your total taxable income from wages and other sources was high, progressive taxation applied, increasing tax rates as income rose. Moreover, the aforementioned loss-offset provisions were limited to over-the-counter FX only.

However, from January 1, 2012, tax rules were revised, and over-the-counter FX also became subject to separate self-assessment taxation, like Click 365. As a result, both are equal in taxation. Because of this, many traders no longer find Click 365 particularly appealing. But is that really the case?